Focus: NeutralPrimary: Growing, production, and distribution of medical and recreational marijuana in the United States, through its subsidiaries AMA and Infused. These co’s produce cannabis, edibles and infused products, including hemp-based. It also has a Canadian subsidiary, Spire, in the online cannabis sales security business.
Secondary: Commercialization of automated triage diagnostic imaging tool for the triage of stroke patients.

Markets: NeutralPrimary: Las Vegas, Nevada, where recreational cannabis has been legal since July 2017. Las Vegas has a population of 2 million, with 45 million visitors per year. First year statewide sales will be close to $400 million with about $60 million in tax revenue. About 50 of the state’s 60 dispensaries are in Las Vegas, selling medical and recreational. Dispensaries can get cultivation licenses, which means cultivators without retail locations may get put out of business.
Secondary: Colorado (through a licensing agreement with Denver Dab Company)

Operations: NeutralCultivation: N/A
Current production: N/A
Future production: 1,500+ kgs from AMAs’ 12,000sf facility. 5,000 sf Infused facility will also produce
Distribution: N/A
Direct sales: No, it does not appear to sell retail or have a retail sales license
Store networks: It appears to currently sell all its goods wholesale

Integration/Diversification:Vertically integrated: It grows, and produces brands, but does not appear to sell retail.
Horizontally diversified: Yes. In addition to cannabis production and wholesales, it is involved in cannabis security consulting, and hemp production (15%), which is smart. If there is ever a crackdown on cannabis, hemp is legal.

Risks:Friday Night is currently focused on the Nevada market. While cannabis is legal in Nevada, it is still illegal federally, so a federal crackdown could seriously damage Friday Night. Due to the US federal laws, Friday Night cannot access the public capital markets in the US. However, it is HQ’d in Canada, so it could access the capital markets in Canada.

Recommendation: Neutral

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Risk of Prosecution for Marijuana-Related Companies. If you are considering investing in a company that is connected to the marijuana industry, be aware that marijuana-related companies may be at risk of federal, and perhaps state, criminal prosecution. The Department of Treasury recently issued guidance noting: “[T]he Controlled Substances Act (“CSA”) makes it illegal under federal law to manufacture, distribute, or dispense marijuana. Many states impose and enforce similar prohibitions. Notwithstanding the federal ban, as of the date of this guidance, 20 states and the District of Columbia have legalized certain marijuana-related activity.”